Bitcoin has had a difficult few weeks, topping off a terrible year that’s seen it lose around 80% of its value since its all-time high 12 months ago.
While many are worried that Bitcoin—as well as many other major cryptocurrencies such as Ripple’s XRP and ethereum—could now be dead in the water, others are confident this is just another blip in the long Bitcoin saga.
Now, the managing partner of Dragonfly Capital Partners, a U.S. crypto-focused venture capital firm, has said he thinks Bitcoin has crossed a major milestone this year, with its chances of falling to zero almost non-existent.
Bitcoin has fallen sharply since it peaked at almost $20,000 at the end of 2017, crashing to yearly lows of around $3,150 earlier this month after a chaotic few weeks and prompting many to try to call a bottom to the turbulent market.
“Bitcoin could maybe fall as low as $2,000, or even $1,000, but not $0,” said Alex Pack, a former fund manager at Bain Capital Ventures. “And that’s a milestone for an asset.
“For something like Bitcoin, which is a landmark in the history of money, it has become a more dependable store of value,” Pack added. “People buying and using it have got to be confident it’s not going to zero.”
As the Bitcoin and wider cryptocurrency market has fallen in value, investors have fretted over slow adoption among retailers and consumers, delays to long-awaited institutional investment, and the ever-present threat of tougher regulation.
Bitcoin has bounced over the last week, climbing back above the psychological $4,000 mark. Some market watchers think this rally will not last, however.
But Peck said that thanks to the developments seen in 2018, specifically interest in Bitcoin futures from Nasdaq and the New York Stock Exchange, and the interest generated from Bitcoin‘s epic bull run last year, his “confidence has never been higher.”
“Back in 2014 there was a much smaller group of investors. Bitcoin and crypto were still very niche, which caused a lot of uncertainty,” Pack said. “The question now is ‘how long this bear market will last?’ The death cries seem far softer than in previous downturns and the people involved now have more patience. We think we’ll be able to weather the storm.”
In October it was revealed Dragonfly Capital Partners has raised $100 million for its inaugural fund to invest in cryptocurrency startups.
Pack, along with venture capital veteran Bo Feng, are looking to invest in three types of assets: crypto-native funds that want to be become the next asset management dynasties for the crypto-asset class; protocols and applications that will be the foundation of the decentralized economy; and pick-and-shovel tech startups building bridges between the decentralized and centralized worlds.
Dragonfly’s investors include cryptocurrency exchange OKEx and cryptocurrency mining equipment maker Bitmain, both based in Beijing. Bitmain’s long-expect stock market float has come under doubt in recent weeks, casting a shadow over the whole sector.
Pack is concerned the U.S. and Europe could fall behind global development due to heavy-handed regulation. Dragonfly plans to bridge Western tech development with the demand for crypto and blockchain services in Asia and the developing world.
“A lot of the infrastructure and technology is being built in the West but most of the user base is in Asia. It’s China, Hong Kong and Japan where the most compelling use cases can be found and it would be difficult to implement a lot of these new, exciting things in the West,” Pack said.
“Crypto development moves so quickly, and at a significantly faster speed than the internet, for example. What could take five years in internet development, can happen in around two years in crypto.
“The U.S. is in danger of losing its tech giant crown to Asia and the clock is ticking. I’d say it has just one or two years until that happens.”
“Fast moving internet companies like Facebook like to ask for forgiveness, not for permission. It’s far harder for crypto companies to do this.”